This book makes original contributions to the literature on clusters, human capital, and regional development by focusing on the link between entrepreneurship and economic growth, aiming for a better understanding of the dynamics of growth determined by the entrepreneurs action in the regional space. Introduction we investigate the determinants of regional development. Nov 18, 2012 a spatial equilibrium is a regional allocation of entrepreneurial human capital, workers human capital, and physical capital k i such that a entrepreneurs hire workers, physical capital, and land to maximize profits. Thus, equation 1 could be estimated by substituting s for human capital and estimating the growth relationship directly. Human capital investment, however, generates higher or comparable return in lessdeveloped regions than that in developed regions. Human capital is the fundamental source of economic growth.
Therefore, although both policies have a high impact on growth, investing in human capital would be a more effective policy to reduce regional income gaps. The underdeveloped countries need human capital to staff new and expanding government. This is followed by a discussion of the regional aspects of the relationship between human capital and growth, focusing on the drivers and. Usually regions with higher human capital endowment have higher per capita output, lower unemployment rate and higher wages than regions with lower level of human capital. Human capital development african development bank. Human capital and regional development, the quarterly journal of economics, oxford university press, vol. We combine the cross regional analysis of geographic, institutional, cultural, and human capital determinants of regional development with an examination of productivity in several. The results show that historical human capital is a significant determinant of todays regional levels of innovation and economic development in. International labour mobility and uneven regional development in europe allan m. The impact of human capital on economic growth sciencedirect. The authors examine the effects of two forms of capital, i. Equipped with education, skills and jobs, its youth. Human resource development edinburgh business school.
Pdf on jan 1, 2009, alessandra faggian and others published human capital and regional development find, read and cite all the research you need on researchgate. The importance of human capital for the economic development. The people that make an organization run are an asset to be invested in. Human capital and regional development erepositori upf. Generally, human capital represents the assets each individual develops to enhance economic productivity. International labour mobility and uneven regional development. This chapter aims at showcasing to a broad audience how the concept of human capital can add to our understanding of regional economic growth and development. The longrun impact of human capital on innovation and. Jul 26, 2019 this chapter aims at showcasing to a broad audience how the concept of human capital can add to our understanding of regional economic growth and development. Entrepreneurship, human capital, and regional development.
Human capital and regional development tuck dartmouth. By human capital we mean the knowledge and skills people possess that enable them to create value in the global economic system. Human capital and economic development simon appleton and francis teal 1. This then, restricts even further the prospects of using the worlds accrued technical, capital and human resources for the establishment of a viable. More specifically, each of the various components of human development is likely to have a distinct impact on economic growth. The success of the policy is largely determined by the identification of factors that contribute to such disparities. Human capital and regional development the quarterly. We argue that empirical models that treat institutions and human capital as exogenous are misspecified, both because of the usual omitted variable bias problems and because of. However, the links between human capital and national economic development may not necessarily be the same as those between human capital and regional economic development. Pdf human capital and regional development researchgate. In fact, the major difference between the developed and developing countries is the rate of progress in human capital.
These are not simply costs but investment with valuable returns that can be calculated. Developing and promoting the adoption of relevant policies and strategies. This course is designed to provide a complete, integrated introduction to the process, practices and perspectives of this important area of people management. Insight report the global human capital report 2017. The evidence points to the paramount importance of human capital in accounting for regional differences in development, but also suggests from model estimation and calibration that entrepreneurial inputs and human capital externalities are essential for understanding the data. Pdf we investigate the determinants of regional development using a newly constructed database of 1569 subnational regions from 110 countries.
Further, human capital is concerned with the wholesome adoption of the policies of education and development. Raising human capital has emerged as a key policy priority, particularly for lowskilled individuals, who are at risk of being left even further behind. We investigate the determinants of regional development using a newly constructed database of 1569 subnational regions from 110 countries covering 74 percent of the worlds surface and 96 percent of its gdp. A spatial equilibrium is a regional allocation of entrepreneurial human capital, workers human capital, and physical capital k i such that a entrepreneurs hire workers, physical capital, and land to maximize profits. The reason for this is that there are two quite distinct sets of human capital impacts on regions, the. The global human capital report 2017 vii how nations develop their human capital can be a more important determinant of their longterm success than virtually any other factor. Innovative strategies for accelerated human resource development in south asia ta6337 reg. Theoretical framework of human capital development of. Pdf human capital in regional development, 1997 dumitru. Measurement of human capital is realised by human capital index, which in determination of the european union is based on four group of areas. Human capital and regional development andrei shleifer.
This means you should think ahead about what you are trying to achieve and what your desired results might look like. Jan 30, 2009 however, the links between human capital and national economic development may not necessarily be the same as those between human capital and regional economic development. In order to understand these issues we begin in section 2 by analysing the nonspatial impacts of human capital on economic. The report was completed in 2014 under the development partnership program for south asia. On the general and specific human capital general human capital is to be defined by generic knowledge and skill, not specific to a task or a company, usually accumulated through working experiences and education alan at al. The african development banks human capital strategy aims to harness the potential of 1 billion africans through skills development and investments in new technologies to promote quality jobs and workforce competitiveness. In this initial growth work, human capital was simply measured by school attainment, or s. Pdf human capital and regional development semantic scholar. This model can be applied on a broad scale where investments in human capital are. Human capital, economic growth, and regional inequality in. Ahhd leads the banks efforts to enhance human capital for africas economic transformation.
Second, it is difficult that human capital itself independently contributes to individual development and national economy growth. With a population bigger than any other continents, africa has a huge asset and a strong competitive advantage. The intangible human capital, on the other hand, is an instrument of promoting comprehensive development of the nation because human capital is directly related to human development, and when there is human development, the qualitative and quantitative progress of the nation is inevitable. Plan ahead to assess results the objective of the human capital plan is to maximize the value of a companys investment in people. Risk, vulnerability, shocks and climate change 48 4. Introduction health and education are both components of human capital and contributors to human welfare. The concept of human capital stems from the economic model of human resource capitalism, which emphasizes the relationship between improved productivity or performance and the need for continuous and longterm investments in the development of human resources. One index of human welfare, which incorporates income, education and health, shows that africas level of human development is the lowest of any region in. Evidence from developmental economics 267 concept as traditionally defined to say that expenditures on education, training, and medical care, etc. Pdf human capital and regional development alessandra. Providing multisector expertise to the regional hubs and african countries. Human capital planning is a systematic process for identifying the resource pool and its capabilities to meet organization goals and developing the strategies to meet the requirements to fulfill those goals. However, the effect of human capital on sustainable industrial development in nigeria has not been adequately explored. One of the key determinants of economic success is human capital.
Regional variations in human development performance 28 3. To organize the discussion, we present a new model of regional development that introduces into a standard migration framework elements. The role of human capital in industrial development. Policy in this area is focusing on early childhood development, improving quality and choice in schooling, creating excellence in tertiary education, and widening access to adult learning. Williams, vladimir balaz, and claire wallace european urban and regional studies 2004 11. Addressing risk and vulnerability of the poor 48 4.
It is based on workforce planning and is supported by talent management systems. It is a source of both increased productivity and technological advancement. In short, the human capital theorists argue that an educated population is a productive population. Pdf on jan 1, 2009, alessandra faggian and others published human capital and regional development find, read and cite all the research. Human capital development is seen as a focal point for pivoting industrial development, for reducing the level of unemployment and increasing the supply of entrepreneurs in any economy. A human capital strategy is a strategy that outlines the human resources and skills needed to allow an organization to achieve its goals. Human capital and regional development alessandra faggian and philip mccann school of geography, university of southampton, highfield. Methodology for a world bank human capital index aart kraay1 jel codes.
What is the role of human capital in economic development. Human capital is regarded to be one of the major sources of economic growth and also as one of important determinants of national and regional differences. Human capital and regional development the quarterly journal. We use secondary data from the world development report on a countrys overall human development to test for a relationship between human capital and innovation. Human capital development is vital to the growth and productivity of the organization. The concept of human capital stems from the economic model of humanresource capitalism, which emphasizes the relationship between improved productivity or performance and the need for continuous and longterm investments in the development of human resources. Human capital development and its impact on firm performance. This is followed by a discussion of the regional aspects of the relationship between human capital and growth, focusing on the drivers and consequences.
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